If
you run a family business, you probably already know research indicates
family-owned businesses tend to have better long-term financial performance
than their counterparts that aren’t run by blood relations. And you’re probably
well aware infighting among family members can lead to breakups, selloffs, and
bankruptcies …
A family business can be a
double-edged sword to many involved – goods and bads, perks and sacrifices.
That being said, a family business is strongest when all come together for the
greater good of the family and the
business. Unfortunately, this isn’t always the case and families can fall into
infighting that actually sabotages family business succession. How do you
protect the family and the business?
A recent article in Bloomberg Businessweek, titled “New Wrinkles on How Family Businesses
Sabotage Themselves,” examines this subject from a fresh perspective. The
article highlights four fundamental pitfalls to avoid:
- Fairness: While parents may want to treat their
children equally, when it comes to the family business this is not a good idea.
In other words, reward according to merit much like non-family employees. - Conflict Avoidance: Bring in directors and
advisors who are not “in” the family or emotionally related to the family.
Independence can help call out the awkward elephants in the room before it is
too late. - Triangulation: Resolve “family issues” within
the family. No one else really needs to see non-business dirty laundry. - Bullying and Scapegoating: Some family members
may try to control difficult situations and even escape personal responsibility
by attacking and blaming others. Stop it early.
Yes, family businesses can fall
victim to their own families. Whether due to good intentions or to rivalries
that have existed since childhood, you need to be wary of family problems
sabotaging the family business.
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Reference: Bloomberg Businessweek (June 17, 2013) “New Wrinkles on How Family Businesses
Sabotage Themselves”